The Journal The Authority on Global Business in Japan

Results of the 27th Business Confidence Survey of the Foreign Chambers of Commerce in Japan (FCIJ) have been released.

Fifteen chambers of commerce and business organizations, including the American Chamber of Commerce in Japan, took part in the poll, conducted between April 14 and 24.

The results of the survey are both interesting and encouraging, with respondents indicating improved overall confidence in the Japanese economy compared with the last survey, in October 2014. This optimism is expected to continue over the coming six months, ahead of the next survey in October.

Respondents reported that business performance and sales had improved since the previous survey, fuelling a sense of optimism regarding the strategies of foreign-affiliated businesses in Japan.

Over two-thirds of respondents forecast growth.

Over two-thirds of respondents forecast growth.

Two alternating questions were included in the survey. The first was regarding the need for structural reform in Japan, where “Make Japanese economy more competitive” was selected by 30 percent of the respondents, while 20 percent chose “Change regulations for domestic & foreign firms” and 18 percent “Change labor relations between workers & firms.”

The second question asked what would be an optimal exchange rate for Japanese and foreign companies. For the yen/dollar, the average response was 109.6, at a time when the actual rate was 119.2–120.3. With respect to the yen/euro, the average response was 124.9.

Regarding their performance in Japan over the coming six months, 76 percent of North American companies forecast growth, while 22 percent predicted that they would sustain their current level.

With regard to profitability, 11 percent of the respondents reported showing “Strong improvement,” 46 percent “Some improvement,” and 30 percent “No change” in the half-year preceding the April poll.

Meanwhile, 15 percent showed “Some decline” and 2 percent said they had experienced a “Serious decline.”

When asked to describe “Reasons behind the changes in business performance,” 52 percent credited their “Own efforts,” while “Exchange rates,” “Other,” and Abenomics were mentioned by 16, 11 and 8 percent of the respondents, respectively.

The FCIJ, an informal organization with roots going back to the mid-1980s, conducted its first Business Confidence survey in April 2002. The association’s next poll will be in the fall.

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For the full report, with additional commentaries, visit: http://www.fcc.or.jp/fcij/bcs.html

The results of the survey are both interesting and encouraging